Indian Tuna Scheme: “Fount Of Corruption And Malpractice”

In the summer of 2011, a capsized fishing vessel about 20 nautical miles from the Vizag coast floated towards a few Indian fishing boats. The fishermen recognized it as a tuna long liner, but it looked remarkably different from the ones made in the country. “And that is when we noticed the hull was painted over,” says Rahman, a traditional fisherman from Visakhapatnam. “It was a foreign ship pretending to be Indian.” The fishermen immediately alerted officials on board the CGG Amadeus, an ONGC survey vessel near them. When they went back ashore, they informed the Association of Indian Fishery Industry, which then told the Coast Guard.

In the past 10 years, the Coast Guard, fishing federations and Indian Ocean Tuna Commission (IOTC) have received several complaints about foreign vessels illegally fishing in Indian waters. Most of the sightings are between November and April, when tuna fish pass through the Indian Ocean. Only one complaint, however, has reached the court; a writ petition filed by YGK Murthy in the Andhra Pradesh High Court in 2010.

“As the incessant sightings by seafaring fishermen show, Indian waters are being exploited by ships that have no business being there,” says Murthy, president of the All India Trawlers Federation. “When serious complaints are ignored, it only means the authorities are in on the whole thing.”

By law, India permits only domestic vessels in its national waters and the exclusive economic zone (EEZ). But as recently as on 19 February, a Greenpeace survey ship encountered four Myanmarese vessels fishing illegally in the Indian seas off the Andaman Islands coast. The foreign vessels neither had proper documents that allowed them to fish in the Indian seas, nor did they clearly display a name. When the marine activists looked into the vessels, they found a catch of commercially lucrative shark and yellow fin tuna.

“We see foreign fishing vessels illegally entering our area all the time,” says Motcham, a fisherman in Manakudi in Kanyakumari district. “But unless we present it as a security threat, they don’t even register a complaint.”

A 2010 study by the University of British Columbia estimates that India incurs a loss of $150-$220 million per year due to illegal and unreported fishing. This, however, is not simply a marine oversight or a security lapse. A government scheme that was devised 10 years ago to improve deep sea fishing is today at the centre of this illegality.

In 2002, the Ministry of Agriculture introduced the Letter of Permit (LoP) scheme, under which Indian fishing firms could buy tuna long liners from foreign companies and operate them in the Indian EEZ. They only had to pay 10 percent of the ship’s value upfront, and the rest could be repaid in due course. In exchange for the LoP, the vessels would have to satisfy some conditions, including using some Indians in the crew, registering the boat in India, reporting all the catch from the Indian EEZ.

Today, every one of these rules is flouted. The modus operandi, as documents and anecdotal evidence expose, is astoundingly routine. LoP vessels are supposed to fly Indian flags, which shows they are registered in India, and have surrendered any other registration. However, flag hopping is common — foreign vessels fly the tricolor when in the Indian EEZ, but change their flag when they go back to their home country.

To enable flag hopping and dual registration, the foreign company that is shown selling the boat to an Indian owner under the LoP, is usually a management company. For instance, an LoP vessel called Gerald-06 was seen in 2008 near Kanyakumari with the Indian flag. The owner, Deepsea Fisheries Management Co, Seychelles, submitted a cancellation certificate from the Tuvalu Ship Registry. When a whistleblower emailed the Tuvalu Registry requesting confirmation of this, an official in the registrar wrote, “The certificates presented... for Gerald No. 6 ARE FORGED.” (Emphasis in original email).

Dual registration is illegal under Section 435 of the Marine Shipping Act. Tehelka has documents to show that several boats from Sierra Leone, Tuvalu and Taiwan are illegally registered in India too.

Officially, there are currently 79 LoP vessels operating in the Indian EEZ as of December 2011. Eight of these with Indian flags on the IOTC list are also listed on the Western and Central Pacific Fisheries Commission with Chinese Taipei flags. If they were not supplying forged documents, this would not be possible.

“The inspiration for adopting the LoP system seems to have come from Taiwan, a global fishing power that is not known for its conservation,” says V Vivekanandan from the South Indian Federation of Fishermen Societies. Taiwan is not a signatory under the IOTC that allows and monitors fishing of tuna in the Indian Ocean. “Still, Taiwan is known for its export of tuna,” points out Vivekanandan. “Where do you think it gets most of this produce from?”

G Prithviraj, a seafood exporter from Vizag who owns several domestic tuna liners, has physically counted 40 Taiwanese vessels in the EEZ in just the past two years. Prithviraj had once participated in the LoP scheme, buying foreign vessels and deploying them to catch tuna. Today, however, he has turned whistleblower, exposing the massive corruption and malpractice that “makes LoP an ecological and economic suicide for Indian fisheries”.

Even today, he says, four Taiwanese ships (SAI-1, SAI-2, SAI-3 and SAI-6) are docked in Chennai under the Indian company Safa Seafoods. They were bought from Taiwan-based Top Fortune Marine International Ltd, which the Organization for Promoting Responsible Tuna Fisheries confirms is a shell company — one that did not own the vessels in the first place. Also, the vessels are still registered in Taiwan, which means they should not have been given the LoP in the first place, and as non-signatories to the IOTC, should not be allowed to fish in the Indian Ocean at all.

“I have sent letters to the Ministry of Agriculture’s Department of Fisheries, to the Coast Guard, to the IOTC, to Mercantile Marine Department, to every authority I could think of,” says Prithviraj, who has been repeatedly threatened by local politicians. “I’m not exhausted by how difficult it is to prove, but by how deep and wide the corruption extends.”

This exploitation is at massive economic loss to the country. To enter the LoP scheme, Indian companies pay only 10 percent of the cost of an already undervalued foreign vessel. A tuna long liner costs an average of Rs 10-15 crore. Only 10 percent of that is paid upfront.

Official industry estimates show that in just one season, an LoP vessel can catch around 1,800 tons of tuna, which is valued at Rs 90 crore, or a cumulative revenue of Rs 630 crore. In exchange, the vessels pay the Indian government a tiny portion.

Also, since it is not mandatory for LoP vessels to land fish at the base port in India, they often offload their catch on another ship at sea. “Globally, transshipment at sea is one key mechanism through which ships launder their catch and evade regulations,” says Areeba Hamid, a marine campaigner at Greenpeace.

Although RBI guidelines allow midsea transfers, the IOTC does not allow this for tuna, unless there are special observers. “Almost all foreign vessels trade midsea, and the LoP loophole makes it difficult to track fish catches on the Indian EEZ,” points out Hamid.

The fisheries sector contributes about 2 percent to the GDP and earns $2.8 billion via seafood export. The Marine Products Export Development Authority sees India exporting tuna to the tune of $500 million by the end of this year. But the LoP scheme, ridden with gaping holes, is a fount of corruption and malpractice, encouraging fraud and exploitation. Moreover, in a time of depleting global fish resources, it is subsidizing overfishing. “There is no tweaking this disaster of a scheme,” says Vivekanandan. “It simply needs to go.”